Started from the bottom, now we are where?
Bitcoin is currently switching ownership for 47tsd $ and companies are using investor’s money to buy even more.
On every corner of the internet a promising price prediction is popping up, telling you to buy BTC, ADA, ETH and what else right now if you want to get rich and people really believe those shiny videos with self proclaimed experts, who are appearantly willing to share their secret to financial wealth with you. BTC is the next digital gold… is it?
Well let me ask you a question and try to be as honest with me and yourself as you can:
One Sunday morning you wake up rested, it was a sunny day and you decide to take a hike in the woods. You take a different trail this time; it seems more adventurous and suddenly you discover a cave. As you go inside, you take out your smartphone to use its flash function and see something yellow shiny on the walls. As you scratch some off with your pocket knife you realize that this is gold.
Now the actual question: Do you write a blog, twitter or youtube about it and tell people you have found a cave full of gold?
That’s what I have thought. You first collect everything and then might brag about it after the cave as been emptied out.
So why do you think people seem to give away their “secret” so easily?
How about, because they are already invested and by telling people to buy in, they drive demand up and the price will increase?
This time we have big companies like Grayscale, MicroStrategy and Tesla invested with billions of USD and individuals think this will really mean BTC is on a save path to 100k, 200k or more. But is that so? The only risk I am seeing is that the higher the concentration of BTC or mining power with an entity, the more receptive it becomes towards manipulation.
Satoshi Nakamoto introduced BTC with a difficulty of mining, trying to avoid that the mining power could be centralized and yet we have a few companies in China with the biggest mining power. There is no chance for you to mine any BTC and on the other hand those big companies can sell BTC, forcing the price to go down and buy BTC back up at a lower level. Finally they sell small fractions of BTC for profit taking and that is how Grayscale’s BTC Trust actually makes their money. This is not like the stock market, where you buy a company’s share, providing them capital, so that they can produce a good and the value of the company and thus share will increase. (The stock market is manipulated as well unfortunately)
BTC does not do anything and has no awareness and yet people see it as a store of value. But you do not really “store” your value into it, since it is not like a safe that will show you your exact investment at the time you bought it. It will either be more or less and as more big companies get involved, the more controllable it will become to them.
The idea behind Bitcoin, envisioned in Satoshi Nakamoto’s whitepaper, is great, but as usual people use it for their own agenda. Many great ideas and inventions of human kind have experienced these exploitations.
To be fair, I do not think that even gold has any real value, but I was hoping to make a statement with my comparison.
So the next time you hear the next path to financial wealth, ask yourself why would a total stranger tell you their secret.
There are two things we should always remember:
- Real value are in those things we can consume and that will keep us alive. So ask yourself: Can I eat/drink it? Will I survive with that ?
2. There are two rules to success:
- Never tell everything you know…
